After a brief period of outflows, cryptocurrency investment products have returned to inflows, reflecting a recovery in investor confidence.
Market Changes Caused by Economic News
At the beginning of last week, crypto funds experienced outflows of about $1 billion, driven by investor concerns over slow growth following weak U.S. job reports. However, the situation improved later in the week, with $1.57 billion returning to the market.
This change was largely attributed to new rules allowing digital assets to be included in 401(k) retirement plans, encouraging many investors to put their money back into crypto assets. The United States led the way with $608 million flowing into crypto funds, while Canada and Australia added $16.5 million and $7.9 million, respectively.
Growth of Ethereum Funds and Their Impact
Ethereum-based funds had a stellar week, gaining $268 million last week. The price of ETH surpassed $4,000 for the first time in eight months, attracting investor interest. Year to date, Ethereum funds have raised a record $8.2 billion, increasing total assets to $32.6 billion. The majority of these inflows came from U.S. Ethereum ETFs, highlighting the shift toward Ethereum investments.
Recovery of Bitcoin Funds and Future Projections
Bitcoin-based funds also saw a recovery after two weeks of outflows, bringing in $260 million last week. Most of the inflows originated from U.S. Bitcoin ETFs, which added $253.2 million. Meanwhile, other cryptocurrencies like Solana, XRP, and Near also noted positive gains. Despite these positive trends, some analysts express caution, emphasizing that Bitcoin remains prone to volatility due to its market liquidity.
The inflows into crypto investment products amid new economic measures reflect the growing acceptance of cryptocurrencies as part of investment portfolios. Nonetheless, caution remains among some investors, especially in Europe.
